Revenue Management Dictionary

  
Average Daily Rate (ADR)
One of the most common terms used in Revenue Management. Is calculated by dividing total room revenue by total rooms sold.
click here to learn more

Best Available Rate (BAR)
The rate at which that any guest can buy a room without applying any restrictions.
click here to learn more

Booking Pace
Rate of change (speed) of reservations being made for a particular date in the future.
click here to learn more

Business Mix
Also known as channel mix, is a characteristic of different sources of business booked in a hotel

Channel Management (CM)
Tool used by hoteliers to control sources of business through various systems including OTA, GDS, hotel’s website, etc.

Competitive Set
More commonly referred to as a “comp set,” is a group of close competitors usually similar in size and level of luxury of the property.

Constrained Demand
More simply put - number of rooms in the market.

Cost of Walk (COW)
The amount hotels pays if a guest has to be turned away. Usually includes price of the room in a partner hotel, transportation and comps given. More extensive calculation includes potential loss of future business.
click here to learn more

Days to Arrival
Number of days before arrival of a guest or a group.

Elasticity
Measure of change in quantity demanded based on change in price.

Displacement
Calculation of taking one piece of business over the other, usually in the context of constrained demand and group bookings.

Exponential Moving average
Statistical smoothing technique used to extrapolate occupancy trends. Usually built in Revenue Management System as a part of other statistical calculations.

House
Colloquial - Usually used in reference to the property.

Global Distribution System (GDS)
Reservation Platform used by Hotels and Airlines. While OTAs have taken market share from GDS it still remains popular in many countries.

Group Wash
Also known as “Wash,” is the difference between actualized group reservations and amount reserved.

Last Room Value (LRV)
Room Revenue hotel should receive from last room available for sale. Used to restrict lower valued business.

Length of Stay (LOS)
Number of nights a guest plans to stay at the hotel.
click here to learn more

Market Segment (MS)
Customers sharing similar characteristic in their purchasing behavior.

Maximum Length of Stay (Max LOS)
Restriction imposed either by a hotel either by government on the consecutive amount of day a guest can reside in a hotel.
click here to learn more

Minimum Acceptable Rate (MAR)
Lowest rate that can be given to a group.

Minimum Length of Stay (Min LOS)
Type of restriction used over high demand period, quite literally, indicating minimum amount of night that a customer can book.

No-Show
A guest with reservation who has hasn’t arrived (“showed up”)
click here to learn more

No – Show percentage
Percentage of customers who did not arrive. Expressed as a rate of a total house.

Occupancy (Occ)
Percentage of occupied rooms in a hotel. Most commonly referred to in the context of total rooms.

Occupancy Forecast
Report showing occupancy trends over a specified period of time.

OTAs
Online Travle Agents. Expedia, Orbitz, Priceline are all examples of OTAs.

Overbooking
Practice of selling more rooms than the property’s total capacity
click here to learn more

Pick up
Number of rooms booked during a spectified time period for

Qualified Rate
Room price that is given to customers who have certain memberships like AAA, etc.

Revenue Management System
Commonly known as RMS, is a system that helps revenue managers achieve optimal pricing decisions.

Revenue per Available Room (RevPAR)
Net revenue received from rooms divided by total rooms available.

Room Block
Rooms assigned to a specific customer, often a company.

Shoulder Nights
Nights adjacent to peak occupancy days.
click here to learn more

Transient
Travelers making reservations on their own
click here to learn more

Unconstrained Demand
Theoretical total number of guests demanding a product if it were not constrained by price.

Yield Management
A process through which revenue and most importantly profitability is maximized.
click here to learn more